Is PS Business Parks Inc (NYSE:PSB) a superb investment right now? Hedge funds are taking a pessimistic view. The number of bullish hedge fund bets fell by 6 recently.
To most stock holders, hedge funds are seen as worthless, old investment vehicles of the past. While there are greater than 8000 funds with their doors open at the moment, we at Insider Monkey look at the upper echelon of this group, around 450 funds. It is widely believed that this group has its hands on most of the smart money’s total capital, and by paying attention to their highest performing picks, we have deciphered a number of investment strategies that have historically beaten the broader indices. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outperformed the S&P 500 index by 23.3 percentage points in 8 months (see the details here).
Just as key, bullish insider trading sentiment is a second way to break down the marketplace. There are a number of incentives for a bullish insider to downsize shares of his or her company, but only one, very clear reason why they would behave bullishly. Several empirical studies have demonstrated the valuable potential of this method if shareholders understand what to do (learn more here).
Consequently, it’s important to take a peek at the latest action surrounding PS Business Parks Inc (NYSE:PSB).
How have hedgies been trading PS Business Parks Inc (NYSE:PSB)?
Heading into Q2, a total of 8 of the hedge funds we track were long in this stock, a change of -43% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings meaningfully.
According to our comprehensive database, Royce & Associates, managed by Chuck Royce, holds the most valuable position in PS Business Parks Inc (NYSE:PSB). Royce & Associates has a $13.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Cliff Asness of AQR Capital Management, with a $9.9 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining hedge funds that hold long positions include Jim Simons’s Renaissance Technologies, D. E. Shaw’s D E Shaw and John Overdeck and David Siegel’s Two Sigma Advisors.
Judging by the fact that PS Business Parks Inc (NYSE:PSB) has witnessed falling interest from the smart money, we can see that there exists a select few hedgies that slashed their full holdings at the end of the first quarter. It’s worth mentioning that Israel Englander’s Millennium Management dumped the biggest position of all the hedgies we watch, valued at an estimated $7.2 million in stock., and Ken Griffin of Citadel Investment Group was right behind this move, as the fund dropped about $1.4 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 6 funds at the end of the first quarter.
What have insiders been doing with PS Business Parks Inc (NYSE:PSB)?
Insider buying is most useful when the company in focus has seen transactions within the past 180 days. Over the latest six-month time period, PS Business Parks Inc (NYSE:PSB) has seen zero unique insiders buying, and 6 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to PS Business Parks Inc (NYSE:PSB). These stocks are Lexington Realty Trust (NYSE:LXP), American Capital Mortgage Investment Crp (NASDAQ:MTGE), Spirit Realty Capital Inc (NYSE:SRC), Brandywine Realty Trust (NYSE:BDN), and Redwood Trust, Inc. (NYSE:RWT). This group of stocks are in the reit – diversified industry and their market caps match PSB’s market cap.
|Company Name||# of Hedge Funds||# of Insiders Buying||# of Insiders Selling|
|Lexington Realty Trust (NYSE:LXP)||15||0||4|
|American Capital Mortgage Investment Crp (NASDAQ:MTGE)||18||3||1|
|Spirit Realty Capital Inc (NYSE:SRC)||19||0||0|
|Brandywine Realty Trust (NYSE:BDN)||9||0||3|
|Redwood Trust, Inc. (NYSE:RWT)||12||0||0|
With the returns exhibited by Insider Monkey’s time-tested strategies, everyday investors should always monitor hedge fund and insider trading sentiment, and PS Business Parks Inc (NYSE:PSB) is an important part of this process.